Stock in virtualization provider VMWare today dropped almost 25%, as growth expectations were lowered and founding CEO Diane Greene was replaced by the board. Prior to today, VMWare was the fourth largest software company in the world, with a market cap of over $20B. They have slipped down the list and lost $5B in value as the company struggles to match high growth expectations places on it after its much-hyped IPO almost a year ago.
Greene, an original founder of the VMWare company, will be replaced by Paul Maritz as President and CEO, and he has also been assigned to the board of the company. Maritz was the founder of Pi Corporation, a cloud based storage and services provider that was acquired by EMC last year. Previously Maritz was the VP of Cloud Services at EMC, and prior to that he was a long-term executive at Microsoft.
The company faces a number of fresh challenges as the virtualization market heats up with the entry of Microsoft with their virtualization platform, now built into Windows Server, and their new Hyper-V product, which will retail for only $28, fractions of the cost of a VMWare solution.
VMWare: A missed opportunity for EMC? Continue reading at Techcrunch IT >>
good, maybe this will humble Aanand V, the Dir of Talent Acquisition, he needs a haircut
The lost in revenue is rightly so. VMWare charges $2K when KVM is free and open source.
VMWare will further drop because the whole purpose of virtualization is to reduce cost and maximize server CPU and memory use. By charging in the thousands for per processor, VMWare is simply not competitive. Expect a more dramatic decline in the coming months as more and more company recognize the VMWare image they are running can easily run on KVM.
With companies have thousands and thousands of servers, the cost benefit is easily justified.
Maritz from MSFT? interesting, but I do so hate to see another tech female CEO being ousted.
That being said, I LIVE on WMWare but haven’t seen any innovation or updates (like drag time, lots of problems with Vista) in the past year. Maybe they were just pushing sales and not innovation.
This will further dampen anyone’s dreams of going IPO too.
More on what happened today (and videos of both Diane Greene and Paul Maritz) here:
http://virtualization.com/news.....ul-maritz/
http://www.xen.org/
I wonder if this has anything to do with it?
nah….
@Chris and Sun and a bunch of others. Its in the TCIT post
Who didn’t see this coming?
Victor is right, ever since the free stuff is around…
interesting …. from a user standpoint I love VMWare Fusion its a great product and am very impressed.
Virtualization technology is quickly becoming a commodity. VMWare should be open sourcing their technology (or at least cutting prices to the bone) while they’re still considered the leader. Get the market share and transform into a services company. The kind of profit they have been making on virtualization software is going away and it’s not coming back. Right about now EMC is looking pretty smart for IPOing this thing while they still had the chance.
Microsoft Hyper-V suck. I would still prefer VMware ESX
I just wanted to point out that Hyper-V costs more than $28 because you still need to pay for the Server 08 host OS.
funny, just had a pretty good write-up in the Economist…
http://www.economist.com/peopl.....d=11662168
oh well
VMware is certainly a pioneer, but I have to agree that we have not seen that much change and/or improvement lately in their products and the open-source products are creeping up.
Netscape was a “pioneer” and they are doing what now? SO as usual the top folks make out and leave the company in shambles. Same thing at VMware. Top folks cash out twice (EMC and IPO) and oooops…the rest of the company gets scraps.
And Diane was no leader. She was a tyrant. She was also an awful manager and hired poor talent. Not surprised it ended like this. Also a lot of the top folks are pretty junior (in age and in experience) so its not surprising they are getting their asses kicked. Their desktop strategy was pathetic. They were very unfriendly to the eco-system.
VMWare Server 2.0 (the free stuff) is in RC1 and is pretty bad ass. MSFT has a long way to go. I’m buying more shares in the 30’s. They like to guide lower then break out earnings! I see them in low 60’s by 2009.
VMWare is a fantastic product. Big companies are too slow in adopting this technology. My work believes I need 3 PCs under my desk to perform my job. Those of us “in the know” use VMWare whenever possible — it’s the old, (pre-global warming) glacier-paced IT department that refuses to embrace new technologies.
Wait, these guys still turn a giant profit. So what? They are worth $15 B even after the “haircut”. What about Slide, Facebook, and all the other companies that still can’t turn a profit?
Like rick, I also just read Diane’s profile in this week’s Economist, which made her sound like an up-and-comer in the Valley and ready to take on Microsoft. Talk about bad timing for that story!
As a layman, my understanding of VMWare’s triumph is just opposite to today’s cloud computing. Their core concept was to simulate a given hardware into multiple computing units. But here, cloud computing is more about integrating all given hardware to one giant computing unit. What is Martiz planning to do? VMnoWhere!!! ;-p
[Saurabh Kaushik]
http://saurabhkaushik.wordpress.com/
I was a little taken aback by the “fourth largest” label. Where does one find a list ranking software companies by market cap?